Is It Time to Sell Your Business?
Are you a Baby Boomer looking to sell your business? Or the child of a Baby Boomer looking to buy one?
A window of opportunity is open right now that (1) is very large, and (2) won’t be open much longer.
It started with a gentle rise nearly 10 years ago and has been slowly increasing. It is peaking now and is predicted to stay near peak levels for another three to four years and then drop precipitously.
What’s especially cool about this trend is that it is providing very high profit opportunities for both buyers and also sellers. But it won’t last forever. So if this is something you are contemplating, you should start preparing for it now.
The numbers are impressive. According to Nick DiFrancesco, a business broker who wrote a persuasive article in LinkedIn that I read last week, the Baby Boomer generation (those born between 1946 and 1964) is in the midst of a “historic wave of retirement, with approximately 10,000 Boomers leaving the workforce each day.”
A decent percentage of these retirees own small- and mid-sized businesses, and many of those businesses are mature and profitable – giving buyers the opportunity to realize cash flow from day one and, if the buyers can expand market share or increase profits, enjoy significant and steady positive cash flow in the coming years.
There are about 12 million businesses at that size-level operating across the US today. And the majority of them are construction firms, manufacturing companies, and service operations – most of which are resistant to the AI/Robotics revolution that is putting so many higher tech and creative firms out of business, along with their owners and employees.
The size of the arbitrage is enormous. It’s estimated that more than $10 trillion worth of business assets will change hands through sales, mergers, or generational handoffs in the next 10 years. But the biggest part of that – along with the greatest opportunities for profit – is likely to come in the next three to four years.
Most of these businesses that are flooding into market now are owned by single-person operators who have no one to give them to and no succession plan for themselves. That presents the buyer with the opportunity to step in and solve the seller’s problem by making a quick deal on the best possible terms.
In his article, DiFrancesco identifies several factors that have lined up recently to create what he calls a “perfect storm” for making great deals on both sides of the sale.
He points out that…
* Banks have started lending again to small businesses, especially SBA-backed loans under $5 million.
* Buyers? They’re coming from everywhere – first-timers sick of corporate life, private equity firms, big companies buying up smaller businesses, and even tech entrepreneurs wanting to buy traditional businesses just to automate and scale with AI.
* Private equity is shifting down-market, hunting for smaller deals in the $1 million to $3 million EBITDA range because they see real growth there.
* Inflation is down and rates are stabilizing, making conditions for profiting for buyers and sellers better than they’ve been in years.
The buyer pool in 2025, he says, is more diverse than ever. “First-timers, often exhausted corporate folks trying to go independent, are utilizing SBA loans. Strategic buyers and rollup groups are actively snapping up companies to expand their reach. Even tech entrepreneurs are buying operations like HVAC or plumbing – not to work in them, but to automate and turn them into high-efficiency assets. Meanwhile, family offices and private equity firms, flush with cash and desperate for good deals, are competing at the smaller end of the market.”
If you are interested in following up on this, you can contact Nick DiFrancesco here.
